Insurers are overlooking an opportunity to build brand retention and loyalty by not connecting more extensively with their customers and prospects, a new survey by Collinson, a global leader in customer benefits and loyalty, has revealed.
Specifically, 63% of respondents said they were open to further communication, and 73% were interested in receiving targeted product and benefits recommendations. However, only 46% reported hearing from their insurance provider on a frequent basis, and less than two in three (61%) received relevant recommendations.
Insurance has traditionally been a low-contact industry, and the situation has only worsened following the implementation of GDPR in May 2018, when many providers saw their customer lists shrink. According to the survey, over one third (36%) of respondents are not aware if they have provided the necessary opt in to receive updates from their provider.
Perhaps underestimating their appetite for communication, or misunderstanding their motivation for opting out, insurers have begun to shy away even further from reaching out to customers. Respondents said their exchanges were mostly limited to transactional matters like renewals notices (79%); policy updates (67%); and terms and conditions amendments (37%), leading to disinterest and disengagement from consumers.
But consumers want more updates… on their terms
In fact, consumers are open to receiving more useful information from their insurance providers about products and services, as well as the benefits they currently have access to, but may not be making use of. Of those who opted out post-GDPR, 35% said they did so without knowing they were missing out on these updates, and – more importantly – of which half (51%) said they would not have opted out had they known. This presents an opportunity for insurers to raise awareness about the options their customers have and why it’s beneficial to opt in.
However, consumers’ openness for communication is conditional on several factors. Consumers expect the content they receive to be personalised based on their individual needs and interests. They also want updates to provide value to them, for example being offered benefits like flight disruption assistance, or 24/7 global access to a doctor. Indeed, 50% of respondents said they would view their insurer more positively, if they were offered benefits in addition to the core product.
A willingness to share data in exchange for more relevant content
Of course, the ability to personalise communication hinges on robust customer intelligence, and the findings suggested consumers are willing to share the data that would make this possible. Most are willing to share details like occupation (78%), dependents (69%), and a significant amount are also open to informing insurance providers about their interests and hobbies (57%).
However, as with opting in, consumers have certain conditions for divulging their data. Specifically, consumers want transparency about how their data is being used. Of those who have given their insurer permission to contact them or are unaware if they have or not, 41% are requiring clarity that their data won’t be sold onto third parties and 38% want confirmation that data wouldn’t be used to sell other products and services.
Interestingly, 69% would be encouraged to give their insurers permission to contact them in return for a discount on cover at purchase and/or renewal.
An opportunity to provide differentiated experiences
In a highly competitive and price-sensitive market, insurance providers need to find ways to differentiate their experience at the same time as driving retention and loyalty. The findings suggest that many insurers are missing out on the opportunity to personalise their products and services, and to connect with their customers more deeply through meaningful and targeted communication.
“There is a clear desire from consumers for better targeting and tailored experiences, but insurers need to help their customers feel comfortable handing over the data that is needed to create them,” says Lawrence Watts, Head of Insurance, at Collinson. “Insurance providers need to demonstrate the value of more regular and personalised communication in order to gain their customers’ trust. Those who succeed will be able to develop a relationship with their customers beyond that of a service provider, to that of a trusted partner.”
If you are interested in further insights exploring the consumer decision-making behaviour, the relationships customers want with their insurer and the use of data and communications download Collinson’s supporting research paper here.